August 13, 2025 • 40 mins
On this episode Simply Money presented by Allworth Financial, Bob and Brian break down the latest July inflation report and explain why the Fed might finally be ready to cut rates in September. They also dissect investor fears of stagflation and clarify why today's market isn't the 1970s all over again. Later, they dig into why now might be the right time to lock in short-term yields for your cash, whether direct indexing makes sense for higher-net-worth investors, and how to think about pulling money in retirement. Plus, Bob shares how he’s handling the long-term care funding puzzle in his own financial plan.
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Episode Transcript
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Speaker 1 (00:00):
Here.
Speaker 2 (00:00):
This three off is a the American people, we are smart,
authentic voices fifty five krs the talk station. Tonight, a
highly anticipated economic report has been released. You're listening to
Simply Money, presented by all Worth Financial on Bob Sponseller
(00:22):
along with Brian James Well, the eyes of the financial
world were on the July inflation report, which came out
before the opening bell this morning at around eight thirty.
And let's break it down what the numbers actually are
and what they could possibly mean.
Speaker 3 (00:37):
Brian, what are those numbers?
Speaker 4 (00:38):
Bob headline, CPI Consumer Price Index or as we commonly know,
our favorite thing to look at to see how inflation's
coming along.
Speaker 3 (00:45):
So what was a result?
Speaker 4 (00:47):
Two point seven percent year over year. That means we're
paying two point seven percent more than we were paying
about this time of year a year ago. And now
we always talk about on these airwaves, and Andy Stout's
favorite thing to talk about is the FED generally cares
more about the core inflation number that strips out gas
and food prices. And ironically this is a little different
than what we're accustomed to. But gas and food usually
(01:09):
are the things that push thing that push things up.
But the core figure is at three point one percent,
So on those items we're paying three point one percent
more than we were a year ago. But if you
put gas and food back in, it's only two point
seven percent. That's kind of that's bizarro world for me.
For the last couple of decades, it's been the opposite.
Gas has been the problem. But in any case, what
was the main driver behind this shelter so rent, mortgage,
(01:31):
that kind of stuff, that was the main overall driver
of inflation? Go figure, what's in the headlines? This this
very listening area, those of you out there hearing this,
hearing our voices in the Cincinnati area. You live right
in ground zero of the most growth oriented rental rate
area in the country, So not too surprising to hear
(01:51):
that that's driving it.
Speaker 3 (01:53):
Yeah, in this whole rent thing. It's interesting.
Speaker 2 (01:55):
You know, some folks are starting to wonder how this
data is actually gathered. But the one thing we do know,
we've got a shortage of shelter for multi you know,
multi residential homes across the country, in Cincinnati and across
the country, and it's an issue. I don't know how
much of that will be able to be addressed by
(02:16):
interest rates potentially dropping people move out of their starter homes,
or whether we just got to build more apartment buildings.
And then you get into regulation, regulation issues, where to
find the land to do it. People in private industry
that want to build those places, you know, they they
want to make a profit on building them. We got
(02:37):
a real pent up need for low income or even
in some cases subsidize housing. That's what drives That's what's
driving these rents out. I don't see this as a
short term fix that anybody can come along and make
that problem go away overnight. And that's why this inflation number,
this core inflation just continues to linger there at slightly
(02:58):
that over three percent rate.
Speaker 3 (02:59):
Brian.
Speaker 4 (03:00):
Yeah, if if you are somebody or if somebody you
care deeply about is in a situation where they're trying
to buy a home, you know, the starter homes for
young families that kind of think the supply is just
not there, and I think you kind of hit the
nail on the head, Bob.
Speaker 3 (03:12):
I live up in Liberty Township.
Speaker 4 (03:13):
Everywhere the cornfields again are getting turned over with houses,
and none of these are These aren't multi family type houses,
these aren't starter homes. They're they're nice looking. I don't know,
put starting probably in the four or five hundred range,
actually probably a little higher than that. And again that's
got everything to do with where can a build er
make the most profit. It is their god given right
to as a business in the United States to try
to make as much money as possible. However, that means
(03:36):
that we aren't making anything. Nobody is building anything that
is that will make them less money. Therefore, there just
isn't the supply and at some point we're going to
hit a breaking point here. But this is you know,
I do hear older folks sometimes criticizing their younger relatives
because they haven't bought a house yet, they haven't settled down. Well,
the numbers are not the same. Look way under the hood,
(03:56):
and understand what it was like in the seventies and
eighties versus what it's like now. You've got high prices
of housing in general, you've got high insurance interest rates,
high insurance rates based on all the crazy that's going
on out there. It is not the nineteen seventies all
over again. With regard to inflation.
Speaker 2 (04:13):
Yeah, the futures were up on this news, which is interesting.
I think the way the markets at least interpreted this
right after the.
Speaker 3 (04:21):
Announcement came down. And who knows.
Speaker 2 (04:23):
You know, we all know things can fly around at
eight thirty in the morning and by four o'clock we can.
Speaker 3 (04:29):
Move in all kinds of learn that once or twice,
haven't we.
Speaker 2 (04:32):
But I think this news, I think the markets liked
it because it's just stable and it's not surprising, and
it's as expected, in line with expectations. And I think
you're now starting to see you know, we talked about
it yesterday. We're already pricing in about a ninety percent
probability of at least a quarter point rate cut in September,
and I think these numbers today confirmed that that's probably
(04:54):
what we're going to get. The market's like cheaper money,
interest rates falling, and that's why you saw futures up today.
Speaker 3 (05:02):
You know, we live to fight another day.
Speaker 4 (05:03):
Yeah, exactly. And this is like you said, the market
like stability. It can handle slightly bad news. This is
a small tickup in inflation. You know, stuff moves around,
not that big of a deal. But at the same time,
the market just wants to know the answer.
Speaker 3 (05:15):
That's all you're listening to.
Speaker 2 (05:17):
Simply Money, presented by all Worth Financial on Bob Sponseller
along with Brian James. An interesting article came across our
desk from market Watch. Brian, I'm interested in your thoughts
on this because I'm just going to put my cards
on the table right now. I think this kind of
stuff is ridiculous, stupid. But we're going to talk about
this article, and I want to hear what you think.
(05:39):
People are talking about stagflation again, a record number of
investors say US stocks are overvalued, as seven and ten
investors say the economy is headed for stagflation, even though
their investment choices are not really lining up with that
expected mix of higher inflation and low growth.
Speaker 3 (05:59):
That's what baflation means.
Speaker 2 (06:01):
You've got periods of really high inflation and then low
growth or even negative growth or a recession. The latest
Bank of America Global Fund Manager you know research found
seventy percent of those polls said stagflation would be the
best way to describe global expectations for the economy over
(06:21):
the next month, over the next twelve months.
Speaker 4 (06:24):
Yeah, and you know, these these surveys are we should
be we should make a better habit, Bob of going
back to go see the survey we talked about six
months ago. Three out of four Dennis blah blah, blah,
blah blah. Well, what actually came of that stuff?
Speaker 3 (06:38):
Did?
Speaker 4 (06:38):
Were they right? Were they were wrong? This is just
what the herd thought at a given moment in time.
So at this point, and we can speak anecdotally from
conversations we have every single day at our tables here
doing financial plans for people. I don't have a lot
of panicky clients other than the ones who read the
headlines too deeply, such as this one. So that doesn't
mean that there aren't you know, we we don't know
(06:59):
what we don't know. But at the same time, we
don't have the same situation that we had in the
nineteen seventies. There are similarities, I think, and probably the
more interesting one is the political pressure that's being put
on Jerome Powell to make interest rate cuts, which is
a little different than what the Federal Reserve would normally
want to do. That did play a role in nineteen
seventies when President Nixon did the same thing to Arthur
(07:21):
what is his name, whatever, it doesn't matter anyway, he
pressured the ven chair to go ahead and reduce interest rates.
That led to stagflation in a roundabout way. But that's
the only one of the few things that similarities I
can see. Otherwise, businesses are doing okay. One thing that
is interesting to me is if you're looking at how
the market is reacting to this, it's not bailing out
of any and all for profit ventures. The stock market
(07:41):
has just rotated around to a diversified portfolio because you
are looking at global stocks, right, That's where the money
is moving. It's moving out of the United States currently
into global stocks. The international markets are up almost twenty percent. Well,
the SMP is up about eight or nine percent so
far this year. So it's just an interesting move where
I think people saying, all right, the United States a
little bit bumpy, so maybe we'll put our money somewhere else.
(08:03):
But at the same time, I don't see things. I
don't see cracks in the foundation, like are being held
out in some of these articles.
Speaker 2 (08:09):
Yes, same what you want to start throwing around the
nineteen seventies. I looked at the average inflation rate during
the nineteen seventies. It was seven point one percent. Brian,
We're at less than half of that right now, you know,
interest rates aren't terribly high, were it relatively full employment,
(08:29):
corporate earnings are growing at eight nine percent a year.
I mean, things are way better than they were in
the nineteen seventies. But I do think some of these surveys,
and I'm not making light of it at all, but
I think some of these surveys It comes back to
what we've talked about before. It depends on who you ask.
I think, for people with jobs and good incomes and
(08:50):
healthy stock portfolios and real estate holdings, things are pretty good.
But to the point you brought up a few minutes ago,
for younger folks trying to get started here in this
inflationary environment with student loans and tough to find a
place to live and all that, things are not that
great right now, and it's getting a little harder to
find a job. To me, that's the only That's the
(09:13):
only sense I can make out of a survey like
this is you know, are you talking to the haves
or the have nots? And if that gets skewed in
either direction, things can sound a little too bearish in
some of these articles, or a little too bullish.
Speaker 3 (09:28):
Do you agree? Do you agree with that? Oh? Absolutely?
Speaker 4 (09:30):
Remember at the end, at the end of the day,
all these all the media that we're reading, and all
the politicians that we listen to have got to keep
our attention so they can make money and stay in power.
You know, all these on the online articles they're trying
to sell, the ads that are in front of your face,
and politicians are trying to get re elected.
Speaker 3 (09:46):
They have to keep us terrified, keep our attention for
the long haul. But I want to go I'm wanna
go off script here a little bit, Bob.
Speaker 4 (09:51):
This is something we were talking about just before we
started setting this all up today. So the reason that
we're we're we've been we've been at this inflation figure
of somewhere, I mean, two and a half to three
percent for I don't know, a year, year and a half.
It feels like we've just been kind of stuck here
for a while. That's not that bad. This is not
like you said, the average of the seventies was seven percent.
It peaked around fourteen right before President Reagan was swept
(10:14):
into office, because people were kind of annoyed with that
over the long haul.
Speaker 3 (10:18):
But the the fed about it been about now.
Speaker 2 (10:21):
We had an oil in Bargo back there too, I mean,
the price of oil keeps coming down.
Speaker 4 (10:25):
This year, not so why it's not the nineteen seventies.
There are differences, right, didn't mean to interrupt. That's sorry
for that. No, no, no, there's a so just a
little bit of history. But so Ben bernanke I you
remember that name from you know, a decade or so ago,
basically came out and said the Federal Reserve has a
target of two percent, and it has had that for
a long time through the eighties, in the early two thousands,
(10:46):
but it was kind of a secret, and then it
became a big it became big news. That was very
confusing as to why it had been a secret for
so long. Well, all of a sudden that has become gospel.
We've got to get it down to two percent. And
I think Jerome Pale still subscribes to that, which is
why he hasn't been really quick to continue t once
inflation down just a little bit more before he's comfortable
with it. But I think the pressure is starting to
get to him. So we're gonna see that here maybe
(11:06):
in September.
Speaker 2 (11:07):
Yeah, and I hope I'm wrong, but I think it's
gonna be a long time before we see two percent
inflation again. It would take a major recession to get
us back there. But it's just one guy's opinion. Here's
the all Worth advice. Don't always remember, don't chase returns
or panic. Focus on quality, diversification and tax smart financial
(11:28):
planning to protect your purchasing power. It all comes back
to your financial plan, all right. If you've parked a
pile of cash in a highield savings account, should you
move it or stay put? Let's talk through your next
smart move relative to cash. You're listening to Simply Money
presented by all Worth Financial on fifty five KRC the
talk Stationnattie.
Speaker 4 (11:49):
Make us the number one pre set on your car
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Speaker 5 (11:55):
Sounded so good. Fifty five KRC, the talk station.
Speaker 6 (11:58):
All Worth Financial, registered investment advisory firm. Any ideas presented
during this program are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or
estate planning attorney to conduct your own due diligence.
Speaker 2 (12:19):
You're listening to Simply Money presented by all Work Financial.
I'mbop sponsller along with Brian James. If you can't listen
to Simply Money every night, subscribe and get our daily podcast.
Just search Simply Money on the iHeart app or wherever
you find your podcast. Straight ahead of six forty three,
we're answering your toughest financial questions in this edition of
(12:40):
Ask the Advisor. Just last week we were talking about
people who were so bullish on gold, and well, guess
what happened. The price of gold dropped by the largest
amount in three months last week. Why there are reports
that the US is clarifying its tariff plans on gold bullion.
And this is why we preach over and over again
(13:02):
that gold, gold's worth and value is just like anything else,
supply and demand what people are willing buyers and willing
sellers are willing to pay for it. Brian, you know
I did here early this morning, and I know when
the President talks about tariff policy, and this is probably
a good time to mention they did extend to I think,
(13:22):
to no one's surprise, another ninety days on the negotiations
with China, and it sounds like President Trump and President
Chi you'll probably get in a room together somewhere in
the next ninety days. But relative to gold, the President
did come out and say, hey, we are not going
to tariff gold. We're not going to put tariffs on
transferring gold in between countries around the world. And we'll
(13:46):
wait to see how that impacts the price of gold
today or this week. But that should at least calm
people down a little bit on the fears of the
President putting tariffs on gold.
Speaker 4 (13:56):
Unless your own gold, you're probably not real happy right now.
So you know, yeah, that's that's a common question we
get whenever the and it's just people have been trained
to do that throughout their lives because grandma and grandpa
had a pile of gold or something in the in
the jewelry drawer or whatever it is. Something it's kind
of like the standard that people go to. Well, things
are getting a little bumpy. Should I put my my
some of my assets in gold? And I cannot remember
(14:18):
the last time. I mean, I don't think I've ever
told anybody that, yes, that's a good idea, because you know,
let's let's say that the things that impact the price
of anything, most types of your more traditional investments have
the ability to react to it. A business will adjust
how it it'll it'll adjust its expenses to account for
the fact that they now have to pay tariffs or
something like that. They'll adjust prices. Gold can't do any
(14:39):
of that. It just sits there waiting for somebody to
buy it and tell it what its price is, so
there is no way to react. So therefore it is
not the greatest thing to own when you can't control
all the variables around it.
Speaker 2 (14:50):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponsorer along with Brian James. Brian, let's get
into the topic we really wanted to talk about in
this segment, and that's good old and let's face it,
cash has done well the last couple of years. You know,
for the first time in decades, we've been able to
park money and treasuries, high yield money market accounts, even
(15:11):
CDs and hot you know, savings accounts down at the
corner bank and sit there and make you know, around
three point eight four four and a quarter percent.
Speaker 3 (15:19):
It's been great. I think.
Speaker 2 (15:21):
I think a thing to remember is cash is always
pegged to short term rates and inflation, and you do
have to pay taxes on the yield on cash, so
it's always gonna move up and down based on inflation
and short term rates. The question right now with FED policy,
you know we're gonna have the FED meet in September.
I think it's safe to say we're gonna at least
(15:41):
get a quarter point reduction in rates. Is now the
time to do something different with your cash or stay
the course?
Speaker 3 (15:49):
And why? What should we be thinking about?
Speaker 2 (15:51):
Now?
Speaker 3 (15:52):
Is the time to to to learn about these things?
Speaker 1 (15:54):
Right?
Speaker 4 (15:55):
So we are we We have been in a rising
rate environment for several years now. We had been into
declining and flat rate for decades, which meant nobody was
paying attention to interest rate cycles because there weren't any.
They went down on the floor and they stayed there,
and we just basically forgot that it was even an
option to earn money on cash.
Speaker 3 (16:11):
But the cash decision, a bob, If this is not.
Speaker 4 (16:13):
A decision of should I be in cash versus stocks
or bonds or whatever, that's a timing decision, and that's
a terrible thing to be thinking about. Regardless of what
cash is paying, Cash is something that is Its job
is to be there. Its job is not to be
the best earning asset in your portfolio that'll happen in
over very short term time frames. It is not going
to last for a long time. That is not the
core of a financial plan. Its job is to be
(16:35):
there to smooth the bumps for when the engine falls
out the bottom of the car, or somebody loses a job,
or there's a healthscare or something like that. That's what
the emergency fund is for. You absolutely should be getting
three four percent on your emergency fund, and don't be
heartbroken if a month from now it drops to maybe
two and a half or low three percent, because we're
starting to see these rate high or rate cuts rather
so the answer right now might be to do nothing.
(16:56):
If you're already in a position where you've got an
emergency fund that's covered, then good. On the other hand,
if you have if you felt like you've had too
much cash, that's its own argument because a lot of
times we have people who inherited a lot more money
than the lever need for an emergency funt, but they
just can't pull the trigger. Somehow, that becomes the vault
that is untouchable. But this might be a good time
if you have that situation, This would be a good
(17:16):
time to lock it in. This isn't anything exotic. Look
at CDs, treasury bonds, treasury bills, things like that and
lock the rates in now, and I think that's a
really good This is a great time to be thinking
about that if you've got too much cash.
Speaker 2 (17:28):
No, I think we're singing off the same sheet of
music here, Brian. I'm looking at US treasuries right now.
I'm looking at one month yields all the way down
and increments up to ten years. And what's fascinating to
me is the one month yield is higher than the ten.
Speaker 3 (17:43):
Year yield on treasuries right now, Brian. Inverted yield curve
is what that is.
Speaker 2 (17:47):
It's slightly inverted. So I think, to your point, depending
on what your cash needs are. And I have these conversations.
I'm having them with several clients right now. They know
that they're going to buy a house or clothes on
a house in sixty days or one hundred and twenty
days or whatever they're building a home. You can get
strategic here with the yield curve on locking in a
(18:10):
really nice short term you. I mean, you can get
three month money here, two month money a little over
four point three percent. That's a great way to just
park some cash and get that nice yield between now
and when you need the money. But I think to
your point, now is not the time to get cute
here on trying to time the FED and move in
and out. You think time in the stock market's hard
(18:33):
timing the movement of short term interest rates and the
effect on the bond market is darn near and possible,
and so that's not something we want to be doing.
Speaker 4 (18:42):
One other point I want to throw out there, because
if people are sniffing around interest rates on depository type
of things, and I would include treasury bills and that
kind of in that kind of discussion, one thing you
might notice is that the banks aren't going to pay
you more for locking it in for five years than
they'll pay you for locking it into exactly.
Speaker 3 (18:57):
That's the that.
Speaker 4 (18:58):
Slight in version, and the reason is the thanks know
that interest rates are coming down, so they're not going
to lock the money up in a negative position anymore
than you are.
Speaker 3 (19:05):
But that's why you're seeing that, right. Here's the all
Worth advice.
Speaker 2 (19:08):
If your cash has a job to do in the
short term, don't worry about chasing higher returns or getting
cute here. Sometimes the smartest move is to stay where
you are. Is now the time to pull the trigger
on buying a home or selling it? Our real estate
expert Michelle Sloan is in next to discuss the state
of the local real estate market. You're listening to Simply
(19:30):
Money presented by all Worth Financial on fifty five KRC
the talk station.
Speaker 5 (19:35):
Indeed, this is fifty five KARC and iHeartRadio station.
Speaker 2 (19:45):
You're listening to Simply Money presented by all Worth Financial.
I'm Bob Sponseller along with Brian James, joined tonight by
our real estate guru, Missus Michelle Sloan, owner of Remax
Time and Michelle. We've been through I think for you
has been a very busy summer and a very active
real estate market. Update us on where things stand here
(20:07):
as the summers come into a close and we're starting
to get back to school. Tell us how things are
looking out there.
Speaker 7 (20:14):
Well, you are absolutely right. It has been a very
very busy summer May June July super busy. It seems
like all of the people that were on the fence
jumped off and got into the real estate market. I
saw the trends that I was seeing personally were a
(20:34):
lot of people who were in their sixties, maybe close
to retirement or already retired, looking for ways to sell
and buy. So definitely we're seeing a busy real estate market,
especially in Cincinnati, but things are changing. It is the
(20:54):
end of a season when kids go back to school,
and usually August is that lower time of year, and
we are definitely seeing that.
Speaker 3 (21:03):
So right now, the market itself is moderating.
Speaker 7 (21:07):
I think that's a word that you guys could use,
meaning that it's becoming more balanced, meaning that sellers are
not seeing homes sell as quickly because there aren't as
many buyers out there looking right now. So a little
more moderate, a little more patience is needed on both
(21:28):
sides of the transaction. The mortgage rates have not changed
a whole lot, so we're still looking at six point seven,
six point eight, close to seven percent, so I think,
you know, we're not seeing any changes whatsoever in the
mortgage interest rates.
Speaker 4 (21:46):
So, Michelle, I got a question for this, A little
bit off the beaten path here, kind of from a
different point of view. Bit So I live up in
Liberty Township, and every other week there's a cornfield that's
obviously been turned over and it's got basements going into it,
and those are all lovely homes, but they're there. They're
definitely not starter homes up there, and I don't feel
like I see a lot of that out there.
Speaker 3 (22:04):
Also, I'm all in my family situation right now.
Speaker 4 (22:07):
We've got kids in college and Athens, Ohio happens to
be my happy place, and it's looking like there's a
decent chance I might have a second one going there.
So we've kicked around the idea, let's buy a multifamily
and put one somebody in one and then we'll go,
you know, kind of use the other. Anyway, my point is, you're.
Speaker 2 (22:21):
Just looking for an excuse to buy a place to
go party at Ohio.
Speaker 3 (22:24):
You this, ay, go, let's go. Don't don't mislead Michelle.
Speaker 4 (22:28):
If that wasn't clear, then we've never met bob Heny.
Speaker 3 (22:31):
Go let's go.
Speaker 4 (22:33):
I was there last weekend, I'll be there this week
and AnyWho.
Speaker 3 (22:37):
But even out there, I mean, there's.
Speaker 4 (22:39):
There if you want to buy, like a multi family.
Even so, if I'm thinking my point of view is
that now I'm thinking as a real estate investor, look
at it. If I'm looking at that, where can I
even find that stuff? Nobody's building that kind of thing anymore.
Am I missing something?
Speaker 7 (22:50):
You're not missing anything, absolutely, So starter homes, homes in
the price range of and I'm going to say two
hundred and fifty thousand dollars and less are really hard
to find. And if you do find something in that
price point, usually it's not as quote unquote livable as
most people would like.
Speaker 3 (23:11):
So there is a challenge.
Speaker 7 (23:13):
And again that's part of the fact that anything you
build new is going to be at a higher price point.
Speaker 3 (23:20):
There's absolutely no doubt about it.
Speaker 7 (23:22):
Now there are and I'm going to kind of jump
around just a little bit too, there are some new
construction properties in the three hundred thousand dollars range, condos
outside of the two seventy five loop No Lebanon and
out in Batavia Amelia on the west side of town
(23:43):
a little bit farther out, you are seeing some new construction.
But most often the new construction that I see that
as quote unquote affordable is going to be your condos.
So you're going to have monthly fees on top of Now,
I will switch real quick to your question regarding multifamilies.
(24:04):
Those unless you're going to build one they're not a
lot of those in the marketplace today, and that would
be a wonderful, wonderful opportunity if you could find it.
Speaker 2 (24:14):
All right, Michelle, just to follow up on Brian's question
because it was similar to the one I wanted to
ask you, you know, if we moved beat you Well, No,
it's good if if we move inside the two seventy
five belt Way, and you know, we hear in the
news and other media sources how there's just this shortage
of lower income starter homes if we move inside the
(24:35):
two seventy five belt.
Speaker 3 (24:36):
Way Hamilton County toward downtown.
Speaker 2 (24:39):
Is the issue here is the lack of supply driven
by interest rates, meaning that people that are currently living
in these less expensive homes don't want to move and
upgrade their home because of where rates are. Or do
we just simply not have enough of these dwellings and
we need more of this stuff built and we're just
(25:00):
not getting any movement in as far as new construction.
Speaker 3 (25:03):
What's your opinion on that as you survey the market.
Speaker 7 (25:06):
Yeah, I think it's a combination of things, because there
are properties available that are affordable, but if you're inside
the two seventy five loop. A lot of those properties
were built in the nineteen fifties and sixties, maybe seventies,
and they're older and they have some structural issues maybe.
I mean, there was one young person who I was
(25:27):
trying to help and they found a gorgeous, just really
cool place, really different, not your cookie cutter home in
Mount Adams, and it was.
Speaker 3 (25:37):
Affordable for her.
Speaker 7 (25:39):
But when we got in and looked at it, there
was mold there, there were structural issues because it was
built on the side of a hill. You've got so
you can find if it's too good to be true,
and I hate to say this, but it is true,
it really is.
Speaker 3 (25:55):
If it's too good to be true, it probably.
Speaker 7 (25:56):
Is so inside the two seventy five loop, I don't
know that it's because if you built new, the prices
are going to go up. So the most affordable inside
the two seventy five loop is to buy something that
is an older home and then invest in it. You
have to have you have to be prepared to put
(26:17):
money into a property. If you are finding something that's
affordable inside the two seventy five loop, that is a
twenty thirty forty fifty year old home.
Speaker 4 (26:26):
So Michelle something else encouraged to me as we're talking
multifamily duplexes, quads, that kind of thing. I don't feel
like I heard people talk about house hacking anymore. Right, So,
there was a big movement over the last several decades
where people for whom that the space, the living space
itself wasn't quite as important. Maybe a single person or
married no kids, that kind of thing would buy a duplex,
rent out the other side, and basically have their housing covered.
Speaker 3 (26:47):
Their mortgage pain will be covered by the rent.
Speaker 4 (26:49):
I don't hear people talking about that anymore, and I'm
going to go ahead and guess it's because there's just
nothing out there to buy to put yourself in that situation.
Speaker 3 (26:55):
Like you said, do you ever hear about that l one? Yeah,
you're correct, there are just very few. There are some.
Speaker 7 (27:00):
Norwood has quite a few dual family homes. There's there are, definitely,
but a lot of those homes that were two families
have been turned into one families and that extra access
has been taken away. So to move it back into
a two family again, it takes a little bit of cash,
a little bit of thought, and not a lot of
(27:22):
people want to put that much energy into buying a home.
Speaker 2 (27:26):
Very interesting conversation as always with our real estate expert
Michelle Sloan, owner of Remax Time.
Speaker 3 (27:32):
Thank you, Michelle.
Speaker 2 (27:33):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KARC the talk station, Mark Levin.
Speaker 1 (27:41):
Let me tell you some The Internet is breeding evil,
breeding evil, and TikTok is the main culprit. And I
don't know what's happening with TikTok, but that damn thing
needs to be sold now and it needs to be
cleaned up. And I don't want to hear about free
speech and everything else. It's a private company. The company
needs to clean it up because this is crazy. Then
is Chinese and all the crap that people.
Speaker 3 (28:02):
Put on this stuff?
Speaker 5 (28:03):
Mark Levin tonight at ten oh six on fifty five KRC,
the talk station.
Speaker 3 (28:09):
Champion Windows Mega Sex. I don't like what's happening in
all day. We have a possible it's happening in our hometown.
Speaker 5 (28:15):
It's always something as will be fifty five KRC the
talk station.
Speaker 2 (28:26):
You're listening to Simple Money, prison up by all Worth
Financial on Bob Sponsller along with Brian James. Do you
have a financial question you'd like for us to answer.
There is a red button you can click while you're
listening to the show right there on the iHeart app.
Simply record your question and it will come straight to us.
Speaking of questions, Brian, you know we're going to get
into our ask the Advisor segment, Brad and fort Wright asked,
(28:50):
is now a good time to ladder CDs? Or should
I wait until the FED actually starts cutting rates?
Speaker 3 (28:57):
We just kind of talked about this, but uh, Brad,
some advice. Brad got here quick with.
Speaker 4 (29:01):
That question during the commercial breakthare so brands on his toes?
All right, so is now a good time to ladder CDs?
Speaker 3 (29:08):
First?
Speaker 4 (29:08):
I'm going to assume Brad, that you that you've decided
that you've somehow decided that in the grand scheme of
your financial plan, here is the calculated, education, educated decision
on how much I need to have in cash, and
therefore here's what I'm going to deploy that cash in.
Speaker 3 (29:22):
So multi step.
Speaker 4 (29:24):
I wouldn't rush out and buy a bunch of CDs
just because of the interstraight situation, but for the cash
you've got sitting there, it's a good thing to think about. Yeah,
and I would say, whenever we're if you've decided that
CDs are a part or treasury bills something like that
are a part of your picture, then whenever we're facing
rate cuts, which it's starting to look more and more
like we are of the next month, that's the time
to do it. There's no sense in waiting till they
(29:45):
actually cut rates, because, believe me, those rates on the
board at the bank are going to come down instantaneously.
The bank doesn't want to have to pay any more
than it needs to stay competitive, and they'll still be
able to maintain their their profit margin because of the
way they borrow money from the federal government, which will
have just lowered its rates. So I would say, yeah,
now is a good time to make that ladder. I
(30:05):
wouldn't worry about you know, you're not gonna see much
more yield on the longer term ones than you're gonna
see you on the short year. Again, if this is
days of FWO, we just talked about this because of
the way the curve is slightly inverted right now, So
don't be surprised when when you when you look at
the three year versus the five year, you don't see
a huge difference let's go to Robert and Fort Mitchell,
who's got a question for Bob. Bob, Robert would like
(30:26):
to know if direct indexing makes sense for his portfolio,
because he has always just used ETFs. When do you
make that decision?
Speaker 2 (30:32):
Well, Robert, I'm going to give you my favorite answer,
which covers me in all circumstances.
Speaker 4 (30:37):
It depends, thank you so renamed the show. It depends
financial advice. It here here's my take on direct indexing.
I think the larger your portfolio gets, you know, in
a taxable account, the more the tax loss harvesting feature
you know embedded in these direct indexing strategies can make sense.
Let's face, you got to pay a little more in
(30:58):
fees to have a direct indexing strategy versus just a
plane vanilla ETF. But I will say, first of all,
it's good that you're in ETFs. It remains to be
seen because we don't know whether you've got any tax
loss harvesting going on with your ETF portfolio.
Speaker 2 (31:12):
But direct indexing makes the most sense. It's kind of
tax loss harvesting on steroids. The larger that portfolio becomes.
And then the other thing I would add is if
you have a concentrated position in any stock that you're
just trying to get that allocation down responsibly, you know,
over a period of time, to avoid capital gains taxes
(31:33):
and not be over allocated to anyone company or industry.
A direct indexing strategy can make a lot of sense
in that situation.
Speaker 4 (31:42):
Yeah, But and I would throw on top of that
real quick, just just a situation. If you've got you
may have a significant portfolio in your IRA four Oh, okay,
direct indexing can still be beneficial, but.
Speaker 3 (31:51):
There is zero tax benefit there.
Speaker 4 (31:53):
You can find tu in a portfolio, maybe that's a benefit,
but don't look for tax help, all.
Speaker 2 (31:57):
Right, Brian, Randy and Mason ask. He says, Hey, we've
built up a seven figure portfolio, but how do I
make sure we're not taking too much out too early
in retirement?
Speaker 4 (32:07):
Well, Randy, it depends. It doesn't matter how big your
pile is. It matters how big your your stream of
income that is flowing out from it. How quick is
the snowpile melting, That's what meant. That's what matters. So
you know the figures that are out there, This is
there's an old test out there, the something called the
four percent rule, and that's basically somebody went through thirty
year periods, which is roughly the expected life expectancy during retirement.
(32:30):
So let's say nineteen thirty one to nineteen sixty one,
thirty two to sixty two and on all the way
through you know, present day. And the answer to that
was about four percent. That's where you hear that four
percent rule coming from, meaning that there are no thirty
year time periods where if I took out four percent,
I would have run out of money. There are scary
ones to be to be sure, but there weren't anywhere
you actually ran out so over time, giving the ups
(32:52):
and downs of the market, through the best of times
and the worst of times, that's a good, good enough
figure to think about. That is not a financial plan.
The four percent rule is not a financial plan. It's
just licking your thumb and holding up to the wind
just to get a starting point. You still should dig
deep into what do I need to spend now at
this weird period of my life, what do I need
to spend later in retirement, and how should I arrange
my finances so that it all works. That's a plan.
(33:13):
Susan and Madeira would like to know about. She's got
some charitable inclinations. She wants to know, Bob, what if
she donates appreciated stock, can she give it directly to
a charity and avoid capital gains?
Speaker 3 (33:23):
Does that work? It absolutely works, Susan.
Speaker 2 (33:26):
The only caveat here is you have to have owned
the stock for over a year. You can avoid long
term capital gains, not short term. So you got to
check and see what your cost basis is and the
time horizon that you've owned the stock and make sure
you've owned that for over a year.
Speaker 3 (33:41):
And then at that point, yep.
Speaker 2 (33:44):
The great thing about donating stock is you avoid the
capital gains taxes and you still get the deduction if
you can qualify that you know for that deduction based
on your standard deduction. So it is a wonderful strategy
to avoid taxes and help out your favorite charity.
Speaker 3 (34:00):
All right, Brian.
Speaker 2 (34:00):
Ron and Sycamore Township, Mass. I'm selling a rental property.
Should a ten thirty one exchange fit into my life?
Or should I just pay the taxes and simplify things?
Is adding a ten thirty one just complicating things and
muddying the water.
Speaker 3 (34:16):
All this stuff complicates things and muddy the water.
Speaker 4 (34:18):
That doesn't make it a bad thing, but there These
are obviously more complicated Financial Transact ten thirty one exchanges
along with I would say annual of deductions on depreciation
of property or of some of the little secrets.
Speaker 3 (34:29):
That real estate investors enjoy and why they like to
do that.
Speaker 4 (34:32):
So for those of you may not be familiar, if
you own a piece of prop piece of investment property
and you want to sell it and reinvest in something else,
you can actually do that without paying any taxes. That's
a ten thirty one exchange. So I guess ron, I'd
have a bigger question for you. You've owned rental property.
You see what it's like. Are you selling this because
you don't want to plumb toilets on Christmas Eve anymore?
Is that why it is? Or is it simply a
better investment decision? So yes, you could. If you want
(34:56):
to simplify your life and you're tired of dealing with
the with the taxes, or I'm sorry, with all the
extra work comes along with that, then yeah, you need to.
Speaker 3 (35:04):
I would bail out of that and be done with it.
Speaker 4 (35:06):
The ten thirty one exchange plays a role if you
want to continue and it's a more efficient investment something
like that. Now, I want to make sure you know
that you can't take that ten thirty one and go
buy your own vacation home or something like that. It
has to be a like kind investment oriented property.
Speaker 3 (35:20):
All right.
Speaker 2 (35:20):
Coming up next, I've got my two cents on how
I'm funding a potential long term care need. You're listening
to simply Money, presented by all Worth Financial lawed fifty
five KRCE The talk station.
Speaker 5 (35:33):
The News when it happens, Breaking news tonight.
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Live news when you need it.
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News when you least expected.
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We've never quite seen anything like this.
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Keeping you up today on what's happening. This is going
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Speaker 3 (36:01):
Have you been notified that your subsidy for obamaca?
Speaker 5 (36:03):
No?
Speaker 2 (36:03):
Worried that next month I have to choose between groceries
for my kids or gas for my car.
Speaker 5 (36:08):
Talk about it here. Fifty five KRC The talk station.
Speaker 3 (36:16):
They're listening to Simply.
Speaker 2 (36:17):
Money because I have by all Worth Financial. I'm Bob
sponsorller along with Brian James. I want to get in Brian.
We did a segment on how to pay for and
fund you know, a potential long term care need.
Speaker 3 (36:28):
You know, I don't know, late last week or something
like that.
Speaker 2 (36:31):
And you know, while we were talking through that topic,
if I'm just an average listener listening to us go
through all these variety of gobblygook options, I'm sitting there thinking,
what the hell are you guys talking about. You know,
there's so many moving parts. Insurance companies change the premiums,
it will, It can get extremely confusing. So I thought
I would just share what I'm doing, what my wife
(36:54):
and I are doing in terms of funding this potential need.
And I respect the the hell out of you as
a financial advisor, so you know you're going to hear
my thoughts live here, and feel free to poke holes
in it and tell me I'm stupid and.
Speaker 3 (37:08):
Why back at you?
Speaker 4 (37:09):
And I'm ten years younger than you, So write down
all the mistakes you make so I don't have to
make them.
Speaker 2 (37:13):
All right, Here's what I'm doing I've got a I've
got a permanent life insurance policy that I funded for years.
It's got a healthy cash value in it. And this
is the way my little pea brain works. Okay, I
know that there's one hundred percent probability that I'm going
to die someday.
Speaker 3 (37:32):
Right, we can agree on that.
Speaker 2 (37:33):
Yes, you look at the actuarial numbers on long term
care for an average married couple, of the odds are
about fifty percent that somebody's going to need long term
care insurance. So if you buy this traditional long term
care insurance, there's a fifty percent chance that you're just
throwing the money down a rat hole. And the other
thing is companies have done a horrible job price product
(37:57):
in the forty some years that's been around, so the
prices move all over the place. So the way I'm
looking at this, and I've told my wife this, I'm
going to keep this insurance policy. So if you got
to throw me in a room somewhere at a nursing home,
just make sure I got a TV, internet and a
remote so I can watch football and baseball, and that
they come feed me, you know.
Speaker 3 (38:17):
At least once a day. Make sure your socks match.
Speaker 2 (38:19):
And then we can really we can spend what we
need to spend, and then you're gonna have this policy
come through on the back end and backfill what we
need to spend. By the way, my wife is six
years younger than me. She's super healthy, so I want
to make sure that she's taken care of on the
financial But that that's what I'm doing.
Speaker 4 (38:37):
So I want to be clear, you're not talking about
ten thirty five exchanging into a policy that actually has
a long term care run. I just talking about straight up. No,
I'm going to spend our money and then when I
kick it, here Carrie, here's a pile of death benefit
that drops out.
Speaker 3 (38:48):
Of the sky.
Speaker 2 (38:48):
Absolutely okay, because I know my family has a one
hundred percent chance of getting that check someday.
Speaker 4 (38:54):
Okay, So as have you actually run the numbers, because
to me, I at least would be looking at one
of the newer policies with one of those riders just
to see what it looks like.
Speaker 3 (39:02):
Have you ed you done that? Not?
Speaker 2 (39:04):
Not recently? I mean I'm you know, full disclosure, I'm
sixty years old. This policy I've got, I got super
preferred rates, so it's very cheap life insurance. I don't
know if I could go out at sixty and get
you know, ultra preferred. So I haven't looked at the rates.
Are you recommending that's what I do?
Speaker 4 (39:22):
I think everybody ought to educate themselves in these types
of decisions. What are the alternatives I have actually in
front of me, and what does it look like? And
if the answer is stick with it, then stick with it.
That beats the heck out of regret. All right, good stuff.
Speaker 2 (39:32):
Hey, this is the benefit of having two people that
do this stuff, you know on the show going at
it and I will. I will follow your advice, Brian,
and I appreciate it. Thanks for listening tonight. You've been
listening to Simply Money, presented by all Worth Financial on
fifty five KRC, the talk station.
Speaker 5 (39:48):
Who wants to be Rich?
Speaker 3 (39:50):
We call them every day millionaire.
Speaker 5 (39:52):
Every day listen to Dave Ramsey.
Speaker 8 (39:55):
They typically say one of the things that turn their
life around was when they looking at purchasing something rich.
People ask how much broke people and I've been both
brother okay broke. People ask how much down and how
much a month?
Speaker 5 (40:12):
Tonight at seven oh six started asking how much By
fifty five pair z be talk station.
Speaker 3 (40:19):
This is Joe
Here.
Speaker 2 (00:00):
This three off is a the American people, we are smart,
authentic voices fifty five krs the talk station. Tonight, a
highly anticipated economic report has been released. You're listening to
Simply Money, presented by all Worth Financial on Bob Sponseller
(00:22):
along with Brian James Well, the eyes of the financial
world were on the July inflation report, which came out
before the opening bell this morning at around eight thirty.
And let's break it down what the numbers actually are
and what they could possibly mean.
Speaker 3 (00:37):
Brian, what are those numbers?
Speaker 4 (00:38):
Bob headline, CPI Consumer Price Index or as we commonly know,
our favorite thing to look at to see how inflation's
coming along.
Speaker 3 (00:45):
So what was a result?
Speaker 4 (00:47):
Two point seven percent year over year. That means we're
paying two point seven percent more than we were paying
about this time of year a year ago. And now
we always talk about on these airwaves, and Andy Stout's
favorite thing to talk about is the FED generally cares
more about the core inflation number that strips out gas
and food prices. And ironically this is a little different
than what we're accustomed to. But gas and food usually
(01:09):
are the things that push thing that push things up.
But the core figure is at three point one percent,
So on those items we're paying three point one percent
more than we were a year ago. But if you
put gas and food back in, it's only two point
seven percent. That's kind of that's bizarro world for me.
For the last couple of decades, it's been the opposite.
Gas has been the problem. But in any case, what
was the main driver behind this shelter so rent, mortgage,
(01:31):
that kind of stuff, that was the main overall driver
of inflation? Go figure, what's in the headlines? This this
very listening area, those of you out there hearing this,
hearing our voices in the Cincinnati area. You live right
in ground zero of the most growth oriented rental rate
area in the country, So not too surprising to hear
(01:51):
that that's driving it.
Speaker 3 (01:53):
Yeah, in this whole rent thing. It's interesting.
Speaker 2 (01:55):
You know, some folks are starting to wonder how this
data is actually gathered. But the one thing we do know,
we've got a shortage of shelter for multi you know,
multi residential homes across the country, in Cincinnati and across
the country, and it's an issue. I don't know how
much of that will be able to be addressed by
(02:16):
interest rates potentially dropping people move out of their starter homes,
or whether we just got to build more apartment buildings.
And then you get into regulation, regulation issues, where to
find the land to do it. People in private industry
that want to build those places, you know, they they
want to make a profit on building them. We got
(02:37):
a real pent up need for low income or even
in some cases subsidize housing. That's what drives That's what's
driving these rents out. I don't see this as a
short term fix that anybody can come along and make
that problem go away overnight. And that's why this inflation number,
this core inflation just continues to linger there at slightly
(02:58):
that over three percent rate.
Speaker 3 (02:59):
Brian.
Speaker 4 (03:00):
Yeah, if if you are somebody or if somebody you
care deeply about is in a situation where they're trying
to buy a home, you know, the starter homes for
young families that kind of think the supply is just
not there, and I think you kind of hit the
nail on the head, Bob.
Speaker 3 (03:12):
I live up in Liberty Township.
Speaker 4 (03:13):
Everywhere the cornfields again are getting turned over with houses,
and none of these are These aren't multi family type houses,
these aren't starter homes. They're they're nice looking. I don't know,
put starting probably in the four or five hundred range,
actually probably a little higher than that. And again that's
got everything to do with where can a build er
make the most profit. It is their god given right
to as a business in the United States to try
to make as much money as possible. However, that means
(03:36):
that we aren't making anything. Nobody is building anything that
is that will make them less money. Therefore, there just
isn't the supply and at some point we're going to
hit a breaking point here. But this is you know,
I do hear older folks sometimes criticizing their younger relatives
because they haven't bought a house yet, they haven't settled down. Well,
the numbers are not the same. Look way under the hood,
(03:56):
and understand what it was like in the seventies and
eighties versus what it's like now. You've got high prices
of housing in general, you've got high insurance interest rates,
high insurance rates based on all the crazy that's going
on out there. It is not the nineteen seventies all
over again. With regard to inflation.
Speaker 2 (04:13):
Yeah, the futures were up on this news, which is interesting.
I think the way the markets at least interpreted this
right after the.
Speaker 3 (04:21):
Announcement came down. And who knows.
Speaker 2 (04:23):
You know, we all know things can fly around at
eight thirty in the morning and by four o'clock we can.
Speaker 3 (04:29):
Move in all kinds of learn that once or twice,
haven't we.
Speaker 2 (04:32):
But I think this news, I think the markets liked
it because it's just stable and it's not surprising, and
it's as expected, in line with expectations. And I think
you're now starting to see you know, we talked about
it yesterday. We're already pricing in about a ninety percent
probability of at least a quarter point rate cut in September,
and I think these numbers today confirmed that that's probably
(04:54):
what we're going to get. The market's like cheaper money,
interest rates falling, and that's why you saw futures up today.
Speaker 3 (05:02):
You know, we live to fight another day.
Speaker 4 (05:03):
Yeah, exactly. And this is like you said, the market
like stability. It can handle slightly bad news. This is
a small tickup in inflation. You know, stuff moves around,
not that big of a deal. But at the same time,
the market just wants to know the answer.
Speaker 3 (05:15):
That's all you're listening to.
Speaker 2 (05:17):
Simply Money, presented by all Worth Financial on Bob Sponseller
along with Brian James. An interesting article came across our
desk from market Watch. Brian, I'm interested in your thoughts
on this because I'm just going to put my cards
on the table right now. I think this kind of
stuff is ridiculous, stupid. But we're going to talk about
this article, and I want to hear what you think.
(05:39):
People are talking about stagflation again, a record number of
investors say US stocks are overvalued, as seven and ten
investors say the economy is headed for stagflation, even though
their investment choices are not really lining up with that
expected mix of higher inflation and low growth.
Speaker 3 (05:59):
That's what baflation means.
Speaker 2 (06:01):
You've got periods of really high inflation and then low
growth or even negative growth or a recession. The latest
Bank of America Global Fund Manager you know research found
seventy percent of those polls said stagflation would be the
best way to describe global expectations for the economy over
(06:21):
the next month, over the next twelve months.
Speaker 4 (06:24):
Yeah, and you know, these these surveys are we should
be we should make a better habit, Bob of going
back to go see the survey we talked about six
months ago. Three out of four Dennis blah blah, blah,
blah blah. Well, what actually came of that stuff?
Speaker 3 (06:38):
Did?
Speaker 4 (06:38):
Were they right? Were they were wrong? This is just
what the herd thought at a given moment in time.
So at this point, and we can speak anecdotally from
conversations we have every single day at our tables here
doing financial plans for people. I don't have a lot
of panicky clients other than the ones who read the
headlines too deeply, such as this one. So that doesn't
mean that there aren't you know, we we don't know
(06:59):
what we don't know. But at the same time, we
don't have the same situation that we had in the
nineteen seventies. There are similarities, I think, and probably the
more interesting one is the political pressure that's being put
on Jerome Powell to make interest rate cuts, which is
a little different than what the Federal Reserve would normally
want to do. That did play a role in nineteen
seventies when President Nixon did the same thing to Arthur
(07:21):
what is his name, whatever, it doesn't matter anyway, he
pressured the ven chair to go ahead and reduce interest rates.
That led to stagflation in a roundabout way. But that's
the only one of the few things that similarities I
can see. Otherwise, businesses are doing okay. One thing that
is interesting to me is if you're looking at how
the market is reacting to this, it's not bailing out
of any and all for profit ventures. The stock market
(07:41):
has just rotated around to a diversified portfolio because you
are looking at global stocks, right, That's where the money
is moving. It's moving out of the United States currently
into global stocks. The international markets are up almost twenty percent. Well,
the SMP is up about eight or nine percent so
far this year. So it's just an interesting move where
I think people saying, all right, the United States a
little bit bumpy, so maybe we'll put our money somewhere else.
(08:03):
But at the same time, I don't see things. I
don't see cracks in the foundation, like are being held
out in some of these articles.
Speaker 2 (08:09):
Yes, same what you want to start throwing around the
nineteen seventies. I looked at the average inflation rate during
the nineteen seventies. It was seven point one percent. Brian,
We're at less than half of that right now, you know,
interest rates aren't terribly high, were it relatively full employment,
(08:29):
corporate earnings are growing at eight nine percent a year.
I mean, things are way better than they were in
the nineteen seventies. But I do think some of these surveys,
and I'm not making light of it at all, but
I think some of these surveys It comes back to
what we've talked about before. It depends on who you ask.
I think, for people with jobs and good incomes and
(08:50):
healthy stock portfolios and real estate holdings, things are pretty good.
But to the point you brought up a few minutes ago,
for younger folks trying to get started here in this
inflationary environment with student loans and tough to find a
place to live and all that, things are not that
great right now, and it's getting a little harder to
find a job. To me, that's the only That's the
(09:13):
only sense I can make out of a survey like
this is you know, are you talking to the haves
or the have nots? And if that gets skewed in
either direction, things can sound a little too bearish in
some of these articles, or a little too bullish.
Speaker 3 (09:28):
Do you agree? Do you agree with that? Oh? Absolutely?
Speaker 4 (09:30):
Remember at the end, at the end of the day,
all these all the media that we're reading, and all
the politicians that we listen to have got to keep
our attention so they can make money and stay in power.
You know, all these on the online articles they're trying
to sell, the ads that are in front of your face,
and politicians are trying to get re elected.
Speaker 3 (09:46):
They have to keep us terrified, keep our attention for
the long haul. But I want to go I'm wanna
go off script here a little bit, Bob.
Speaker 4 (09:51):
This is something we were talking about just before we
started setting this all up today. So the reason that
we're we're we've been we've been at this inflation figure
of somewhere, I mean, two and a half to three
percent for I don't know, a year, year and a half.
It feels like we've just been kind of stuck here
for a while. That's not that bad. This is not
like you said, the average of the seventies was seven percent.
It peaked around fourteen right before President Reagan was swept
(10:14):
into office, because people were kind of annoyed with that
over the long haul.
Speaker 3 (10:18):
But the the fed about it been about now.
Speaker 2 (10:21):
We had an oil in Bargo back there too, I mean,
the price of oil keeps coming down.
Speaker 4 (10:25):
This year, not so why it's not the nineteen seventies.
There are differences, right, didn't mean to interrupt. That's sorry
for that. No, no, no, there's a so just a
little bit of history. But so Ben bernanke I you
remember that name from you know, a decade or so ago,
basically came out and said the Federal Reserve has a
target of two percent, and it has had that for
a long time through the eighties, in the early two thousands,
(10:46):
but it was kind of a secret, and then it
became a big it became big news. That was very
confusing as to why it had been a secret for
so long. Well, all of a sudden that has become gospel.
We've got to get it down to two percent. And
I think Jerome Pale still subscribes to that, which is
why he hasn't been really quick to continue t once
inflation down just a little bit more before he's comfortable
with it. But I think the pressure is starting to
get to him. So we're gonna see that here maybe
(11:06):
in September.
Speaker 2 (11:07):
Yeah, and I hope I'm wrong, but I think it's
gonna be a long time before we see two percent
inflation again. It would take a major recession to get
us back there. But it's just one guy's opinion. Here's
the all Worth advice. Don't always remember, don't chase returns
or panic. Focus on quality, diversification and tax smart financial
(11:28):
planning to protect your purchasing power. It all comes back
to your financial plan, all right. If you've parked a
pile of cash in a highield savings account, should you
move it or stay put? Let's talk through your next
smart move relative to cash. You're listening to Simply Money
presented by all Worth Financial on fifty five KRC the
talk Stationnattie.
Speaker 4 (11:49):
Make us the number one pre set on your car
radio and on the free Knew It Improved iHeartRadio app
Free never.
Speaker 5 (11:55):
Sounded so good. Fifty five KRC, the talk station.
Speaker 6 (11:58):
All Worth Financial, registered investment advisory firm. Any ideas presented
during this program are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or
estate planning attorney to conduct your own due diligence.
Speaker 2 (12:19):
You're listening to Simply Money presented by all Work Financial.
I'mbop sponsller along with Brian James. If you can't listen
to Simply Money every night, subscribe and get our daily podcast.
Just search Simply Money on the iHeart app or wherever
you find your podcast. Straight ahead of six forty three,
we're answering your toughest financial questions in this edition of
(12:40):
Ask the Advisor. Just last week we were talking about
people who were so bullish on gold, and well, guess
what happened. The price of gold dropped by the largest
amount in three months last week. Why there are reports
that the US is clarifying its tariff plans on gold bullion.
And this is why we preach over and over again
(13:02):
that gold, gold's worth and value is just like anything else,
supply and demand what people are willing buyers and willing
sellers are willing to pay for it. Brian, you know
I did here early this morning, and I know when
the President talks about tariff policy, and this is probably
a good time to mention they did extend to I think,
(13:22):
to no one's surprise, another ninety days on the negotiations
with China, and it sounds like President Trump and President
Chi you'll probably get in a room together somewhere in
the next ninety days. But relative to gold, the President
did come out and say, hey, we are not going
to tariff gold. We're not going to put tariffs on
transferring gold in between countries around the world. And we'll
(13:46):
wait to see how that impacts the price of gold
today or this week. But that should at least calm
people down a little bit on the fears of the
President putting tariffs on gold.
Speaker 4 (13:56):
Unless your own gold, you're probably not real happy right now.
So you know, yeah, that's that's a common question we
get whenever the and it's just people have been trained
to do that throughout their lives because grandma and grandpa
had a pile of gold or something in the in
the jewelry drawer or whatever it is. Something it's kind
of like the standard that people go to. Well, things
are getting a little bumpy. Should I put my my
some of my assets in gold? And I cannot remember
(14:18):
the last time. I mean, I don't think I've ever
told anybody that, yes, that's a good idea, because you know,
let's let's say that the things that impact the price
of anything, most types of your more traditional investments have
the ability to react to it. A business will adjust
how it it'll it'll adjust its expenses to account for
the fact that they now have to pay tariffs or
something like that. They'll adjust prices. Gold can't do any
(14:39):
of that. It just sits there waiting for somebody to
buy it and tell it what its price is, so
there is no way to react. So therefore it is
not the greatest thing to own when you can't control
all the variables around it.
Speaker 2 (14:50):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponsorer along with Brian James. Brian, let's get
into the topic we really wanted to talk about in
this segment, and that's good old and let's face it,
cash has done well the last couple of years. You know,
for the first time in decades, we've been able to
park money and treasuries, high yield money market accounts, even
(15:11):
CDs and hot you know, savings accounts down at the
corner bank and sit there and make you know, around
three point eight four four and a quarter percent.
Speaker 3 (15:19):
It's been great. I think.
Speaker 2 (15:21):
I think a thing to remember is cash is always
pegged to short term rates and inflation, and you do
have to pay taxes on the yield on cash, so
it's always gonna move up and down based on inflation
and short term rates. The question right now with FED policy,
you know we're gonna have the FED meet in September.
I think it's safe to say we're gonna at least
(15:41):
get a quarter point reduction in rates. Is now the
time to do something different with your cash or stay
the course?
Speaker 3 (15:49):
And why? What should we be thinking about?
Speaker 2 (15:51):
Now?
Speaker 3 (15:52):
Is the time to to to learn about these things?
Speaker 1 (15:54):
Right?
Speaker 4 (15:55):
So we are we We have been in a rising
rate environment for several years now. We had been into
declining and flat rate for decades, which meant nobody was
paying attention to interest rate cycles because there weren't any.
They went down on the floor and they stayed there,
and we just basically forgot that it was even an
option to earn money on cash.
Speaker 3 (16:11):
But the cash decision, a bob, If this is not.
Speaker 4 (16:13):
A decision of should I be in cash versus stocks
or bonds or whatever, that's a timing decision, and that's
a terrible thing to be thinking about. Regardless of what
cash is paying, Cash is something that is Its job
is to be there. Its job is not to be
the best earning asset in your portfolio that'll happen in
over very short term time frames. It is not going
to last for a long time. That is not the
core of a financial plan. Its job is to be
(16:35):
there to smooth the bumps for when the engine falls
out the bottom of the car, or somebody loses a job,
or there's a healthscare or something like that. That's what
the emergency fund is for. You absolutely should be getting
three four percent on your emergency fund, and don't be
heartbroken if a month from now it drops to maybe
two and a half or low three percent, because we're
starting to see these rate high or rate cuts rather
so the answer right now might be to do nothing.
(16:56):
If you're already in a position where you've got an
emergency fund that's covered, then good. On the other hand,
if you have if you felt like you've had too
much cash, that's its own argument because a lot of
times we have people who inherited a lot more money
than the lever need for an emergency funt, but they
just can't pull the trigger. Somehow, that becomes the vault
that is untouchable. But this might be a good time
if you have that situation, This would be a good
(17:16):
time to lock it in. This isn't anything exotic. Look
at CDs, treasury bonds, treasury bills, things like that and
lock the rates in now, and I think that's a
really good This is a great time to be thinking
about that if you've got too much cash.
Speaker 2 (17:28):
No, I think we're singing off the same sheet of
music here, Brian. I'm looking at US treasuries right now.
I'm looking at one month yields all the way down
and increments up to ten years. And what's fascinating to
me is the one month yield is higher than the ten.
Speaker 3 (17:43):
Year yield on treasuries right now, Brian. Inverted yield curve
is what that is.
Speaker 2 (17:47):
It's slightly inverted. So I think, to your point, depending
on what your cash needs are. And I have these conversations.
I'm having them with several clients right now. They know
that they're going to buy a house or clothes on
a house in sixty days or one hundred and twenty
days or whatever they're building a home. You can get
strategic here with the yield curve on locking in a
(18:10):
really nice short term you. I mean, you can get
three month money here, two month money a little over
four point three percent. That's a great way to just
park some cash and get that nice yield between now
and when you need the money. But I think to
your point, now is not the time to get cute
here on trying to time the FED and move in
and out. You think time in the stock market's hard
(18:33):
timing the movement of short term interest rates and the
effect on the bond market is darn near and possible,
and so that's not something we want to be doing.
Speaker 4 (18:42):
One other point I want to throw out there, because
if people are sniffing around interest rates on depository type
of things, and I would include treasury bills and that
kind of in that kind of discussion, one thing you
might notice is that the banks aren't going to pay
you more for locking it in for five years than
they'll pay you for locking it into exactly.
Speaker 3 (18:57):
That's the that.
Speaker 4 (18:58):
Slight in version, and the reason is the thanks know
that interest rates are coming down, so they're not going
to lock the money up in a negative position anymore
than you are.
Speaker 3 (19:05):
But that's why you're seeing that, right. Here's the all
Worth advice.
Speaker 2 (19:08):
If your cash has a job to do in the
short term, don't worry about chasing higher returns or getting
cute here. Sometimes the smartest move is to stay where
you are. Is now the time to pull the trigger
on buying a home or selling it? Our real estate
expert Michelle Sloan is in next to discuss the state
of the local real estate market. You're listening to Simply
(19:30):
Money presented by all Worth Financial on fifty five KRC
the talk station.
Speaker 5 (19:35):
Indeed, this is fifty five KARC and iHeartRadio station.
Speaker 2 (19:45):
You're listening to Simply Money presented by all Worth Financial.
I'm Bob Sponseller along with Brian James, joined tonight by
our real estate guru, Missus Michelle Sloan, owner of Remax
Time and Michelle. We've been through I think for you
has been a very busy summer and a very active
real estate market. Update us on where things stand here
(20:07):
as the summers come into a close and we're starting
to get back to school. Tell us how things are
looking out there.
Speaker 7 (20:14):
Well, you are absolutely right. It has been a very
very busy summer May June July super busy. It seems
like all of the people that were on the fence
jumped off and got into the real estate market. I
saw the trends that I was seeing personally were a
(20:34):
lot of people who were in their sixties, maybe close
to retirement or already retired, looking for ways to sell
and buy. So definitely we're seeing a busy real estate market,
especially in Cincinnati, but things are changing. It is the
(20:54):
end of a season when kids go back to school,
and usually August is that lower time of year, and
we are definitely seeing that.
Speaker 3 (21:03):
So right now, the market itself is moderating.
Speaker 7 (21:07):
I think that's a word that you guys could use,
meaning that it's becoming more balanced, meaning that sellers are
not seeing homes sell as quickly because there aren't as
many buyers out there looking right now. So a little
more moderate, a little more patience is needed on both
(21:28):
sides of the transaction. The mortgage rates have not changed
a whole lot, so we're still looking at six point seven,
six point eight, close to seven percent, so I think,
you know, we're not seeing any changes whatsoever in the
mortgage interest rates.
Speaker 4 (21:46):
So, Michelle, I got a question for this, A little
bit off the beaten path here, kind of from a
different point of view. Bit So I live up in
Liberty Township, and every other week there's a cornfield that's
obviously been turned over and it's got basements going into it,
and those are all lovely homes, but they're there. They're
definitely not starter homes up there, and I don't feel
like I see a lot of that out there.
Speaker 3 (22:04):
Also, I'm all in my family situation right now.
Speaker 4 (22:07):
We've got kids in college and Athens, Ohio happens to
be my happy place, and it's looking like there's a
decent chance I might have a second one going there.
So we've kicked around the idea, let's buy a multifamily
and put one somebody in one and then we'll go,
you know, kind of use the other. Anyway, my point is, you're.
Speaker 2 (22:21):
Just looking for an excuse to buy a place to
go party at Ohio.
Speaker 3 (22:24):
You this, ay, go, let's go. Don't don't mislead Michelle.
Speaker 4 (22:28):
If that wasn't clear, then we've never met bob Heny.
Speaker 3 (22:31):
Go let's go.
Speaker 4 (22:33):
I was there last weekend, I'll be there this week
and AnyWho.
Speaker 3 (22:37):
But even out there, I mean, there's.
Speaker 4 (22:39):
There if you want to buy, like a multi family.
Even so, if I'm thinking my point of view is
that now I'm thinking as a real estate investor, look
at it. If I'm looking at that, where can I
even find that stuff? Nobody's building that kind of thing anymore.
Am I missing something?
Speaker 7 (22:50):
You're not missing anything, absolutely, So starter homes, homes in
the price range of and I'm going to say two
hundred and fifty thousand dollars and less are really hard
to find. And if you do find something in that
price point, usually it's not as quote unquote livable as
most people would like.
Speaker 3 (23:11):
So there is a challenge.
Speaker 7 (23:13):
And again that's part of the fact that anything you
build new is going to be at a higher price point.
Speaker 3 (23:20):
There's absolutely no doubt about it.
Speaker 7 (23:22):
Now there are and I'm going to kind of jump
around just a little bit too, there are some new
construction properties in the three hundred thousand dollars range, condos
outside of the two seventy five loop No Lebanon and
out in Batavia Amelia on the west side of town
(23:43):
a little bit farther out, you are seeing some new construction.
But most often the new construction that I see that
as quote unquote affordable is going to be your condos.
So you're going to have monthly fees on top of Now,
I will switch real quick to your question regarding multifamilies.
(24:04):
Those unless you're going to build one they're not a
lot of those in the marketplace today, and that would
be a wonderful, wonderful opportunity if you could find it.
Speaker 2 (24:14):
All right, Michelle, just to follow up on Brian's question
because it was similar to the one I wanted to
ask you, you know, if we moved beat you Well, No,
it's good if if we move inside the two seventy
five belt Way, and you know, we hear in the
news and other media sources how there's just this shortage
of lower income starter homes if we move inside the
(24:35):
two seventy five belt.
Speaker 3 (24:36):
Way Hamilton County toward downtown.
Speaker 2 (24:39):
Is the issue here is the lack of supply driven
by interest rates, meaning that people that are currently living
in these less expensive homes don't want to move and
upgrade their home because of where rates are. Or do
we just simply not have enough of these dwellings and
we need more of this stuff built and we're just
(25:00):
not getting any movement in as far as new construction.
Speaker 3 (25:03):
What's your opinion on that as you survey the market.
Speaker 7 (25:06):
Yeah, I think it's a combination of things, because there
are properties available that are affordable, but if you're inside
the two seventy five loop. A lot of those properties
were built in the nineteen fifties and sixties, maybe seventies,
and they're older and they have some structural issues maybe.
I mean, there was one young person who I was
(25:27):
trying to help and they found a gorgeous, just really
cool place, really different, not your cookie cutter home in
Mount Adams, and it was.
Speaker 3 (25:37):
Affordable for her.
Speaker 7 (25:39):
But when we got in and looked at it, there
was mold there, there were structural issues because it was
built on the side of a hill. You've got so
you can find if it's too good to be true,
and I hate to say this, but it is true,
it really is.
Speaker 3 (25:55):
If it's too good to be true, it probably.
Speaker 7 (25:56):
Is so inside the two seventy five loop, I don't
know that it's because if you built new, the prices
are going to go up. So the most affordable inside
the two seventy five loop is to buy something that
is an older home and then invest in it. You
have to have you have to be prepared to put
(26:17):
money into a property. If you are finding something that's
affordable inside the two seventy five loop, that is a
twenty thirty forty fifty year old home.
Speaker 4 (26:26):
So Michelle something else encouraged to me as we're talking
multifamily duplexes, quads, that kind of thing. I don't feel
like I heard people talk about house hacking anymore. Right, So,
there was a big movement over the last several decades
where people for whom that the space, the living space
itself wasn't quite as important. Maybe a single person or
married no kids, that kind of thing would buy a duplex,
rent out the other side, and basically have their housing covered.
Speaker 3 (26:47):
Their mortgage pain will be covered by the rent.
Speaker 4 (26:49):
I don't hear people talking about that anymore, and I'm
going to go ahead and guess it's because there's just
nothing out there to buy to put yourself in that situation.
Speaker 3 (26:55):
Like you said, do you ever hear about that l one? Yeah,
you're correct, there are just very few. There are some.
Speaker 7 (27:00):
Norwood has quite a few dual family homes. There's there are, definitely,
but a lot of those homes that were two families
have been turned into one families and that extra access
has been taken away. So to move it back into
a two family again, it takes a little bit of cash,
a little bit of thought, and not a lot of
(27:22):
people want to put that much energy into buying a home.
Speaker 2 (27:26):
Very interesting conversation as always with our real estate expert
Michelle Sloan, owner of Remax Time.
Speaker 3 (27:32):
Thank you, Michelle.
Speaker 2 (27:33):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KARC the talk station, Mark Levin.
Speaker 1 (27:41):
Let me tell you some The Internet is breeding evil,
breeding evil, and TikTok is the main culprit. And I
don't know what's happening with TikTok, but that damn thing
needs to be sold now and it needs to be
cleaned up. And I don't want to hear about free
speech and everything else. It's a private company. The company
needs to clean it up because this is crazy. Then
is Chinese and all the crap that people.
Speaker 3 (28:02):
Put on this stuff?
Speaker 5 (28:03):
Mark Levin tonight at ten oh six on fifty five KRC,
the talk station.
Speaker 3 (28:09):
Champion Windows Mega Sex. I don't like what's happening in
all day. We have a possible it's happening in our hometown.
Speaker 5 (28:15):
It's always something as will be fifty five KRC the
talk station.
Speaker 2 (28:26):
You're listening to Simple Money, prison up by all Worth
Financial on Bob Sponsller along with Brian James. Do you
have a financial question you'd like for us to answer.
There is a red button you can click while you're
listening to the show right there on the iHeart app.
Simply record your question and it will come straight to us.
Speaking of questions, Brian, you know we're going to get
into our ask the Advisor segment, Brad and fort Wright asked,
(28:50):
is now a good time to ladder CDs? Or should
I wait until the FED actually starts cutting rates?
Speaker 3 (28:57):
We just kind of talked about this, but uh, Brad,
some advice. Brad got here quick with.
Speaker 4 (29:01):
That question during the commercial breakthare so brands on his toes?
All right, so is now a good time to ladder CDs?
Speaker 3 (29:08):
First?
Speaker 4 (29:08):
I'm going to assume Brad, that you that you've decided
that you've somehow decided that in the grand scheme of
your financial plan, here is the calculated, education, educated decision
on how much I need to have in cash, and
therefore here's what I'm going to deploy that cash in.
Speaker 3 (29:22):
So multi step.
Speaker 4 (29:24):
I wouldn't rush out and buy a bunch of CDs
just because of the interstraight situation, but for the cash
you've got sitting there, it's a good thing to think about. Yeah,
and I would say, whenever we're if you've decided that
CDs are a part or treasury bills something like that
are a part of your picture, then whenever we're facing
rate cuts, which it's starting to look more and more
like we are of the next month, that's the time
to do it. There's no sense in waiting till they
(29:45):
actually cut rates, because, believe me, those rates on the
board at the bank are going to come down instantaneously.
The bank doesn't want to have to pay any more
than it needs to stay competitive, and they'll still be
able to maintain their their profit margin because of the
way they borrow money from the federal government, which will
have just lowered its rates. So I would say, yeah,
now is a good time to make that ladder. I
(30:05):
wouldn't worry about you know, you're not gonna see much
more yield on the longer term ones than you're gonna
see you on the short year. Again, if this is
days of FWO, we just talked about this because of
the way the curve is slightly inverted right now, So
don't be surprised when when you when you look at
the three year versus the five year, you don't see
a huge difference let's go to Robert and Fort Mitchell,
who's got a question for Bob. Bob, Robert would like
(30:26):
to know if direct indexing makes sense for his portfolio,
because he has always just used ETFs. When do you
make that decision?
Speaker 2 (30:32):
Well, Robert, I'm going to give you my favorite answer,
which covers me in all circumstances.
Speaker 4 (30:37):
It depends, thank you so renamed the show. It depends
financial advice. It here here's my take on direct indexing.
I think the larger your portfolio gets, you know, in
a taxable account, the more the tax loss harvesting feature
you know embedded in these direct indexing strategies can make sense.
Let's face, you got to pay a little more in
(30:58):
fees to have a direct indexing strategy versus just a
plane vanilla ETF. But I will say, first of all,
it's good that you're in ETFs. It remains to be
seen because we don't know whether you've got any tax
loss harvesting going on with your ETF portfolio.
Speaker 2 (31:12):
But direct indexing makes the most sense. It's kind of
tax loss harvesting on steroids. The larger that portfolio becomes.
And then the other thing I would add is if
you have a concentrated position in any stock that you're
just trying to get that allocation down responsibly, you know,
over a period of time, to avoid capital gains taxes
(31:33):
and not be over allocated to anyone company or industry.
A direct indexing strategy can make a lot of sense
in that situation.
Speaker 4 (31:42):
Yeah, But and I would throw on top of that
real quick, just just a situation. If you've got you
may have a significant portfolio in your IRA four Oh, okay,
direct indexing can still be beneficial, but.
Speaker 3 (31:51):
There is zero tax benefit there.
Speaker 4 (31:53):
You can find tu in a portfolio, maybe that's a benefit,
but don't look for tax help, all.
Speaker 2 (31:57):
Right, Brian, Randy and Mason ask. He says, Hey, we've
built up a seven figure portfolio, but how do I
make sure we're not taking too much out too early
in retirement?
Speaker 4 (32:07):
Well, Randy, it depends. It doesn't matter how big your
pile is. It matters how big your your stream of
income that is flowing out from it. How quick is
the snowpile melting, That's what meant. That's what matters. So
you know the figures that are out there, This is
there's an old test out there, the something called the
four percent rule, and that's basically somebody went through thirty
year periods, which is roughly the expected life expectancy during retirement.
(32:30):
So let's say nineteen thirty one to nineteen sixty one,
thirty two to sixty two and on all the way
through you know, present day. And the answer to that
was about four percent. That's where you hear that four
percent rule coming from, meaning that there are no thirty
year time periods where if I took out four percent,
I would have run out of money. There are scary
ones to be to be sure, but there weren't anywhere
you actually ran out so over time, giving the ups
(32:52):
and downs of the market, through the best of times
and the worst of times, that's a good, good enough
figure to think about. That is not a financial plan.
The four percent rule is not a financial plan. It's
just licking your thumb and holding up to the wind
just to get a starting point. You still should dig
deep into what do I need to spend now at
this weird period of my life, what do I need
to spend later in retirement, and how should I arrange
my finances so that it all works. That's a plan.
(33:13):
Susan and Madeira would like to know about. She's got
some charitable inclinations. She wants to know, Bob, what if
she donates appreciated stock, can she give it directly to
a charity and avoid capital gains?
Speaker 3 (33:23):
Does that work? It absolutely works, Susan.
Speaker 2 (33:26):
The only caveat here is you have to have owned
the stock for over a year. You can avoid long
term capital gains, not short term. So you got to
check and see what your cost basis is and the
time horizon that you've owned the stock and make sure
you've owned that for over a year.
Speaker 3 (33:41):
And then at that point, yep.
Speaker 2 (33:44):
The great thing about donating stock is you avoid the
capital gains taxes and you still get the deduction if
you can qualify that you know for that deduction based
on your standard deduction. So it is a wonderful strategy
to avoid taxes and help out your favorite charity.
Speaker 3 (34:00):
All right, Brian.
Speaker 2 (34:00):
Ron and Sycamore Township, Mass. I'm selling a rental property.
Should a ten thirty one exchange fit into my life?
Or should I just pay the taxes and simplify things?
Is adding a ten thirty one just complicating things and
muddying the water.
Speaker 3 (34:16):
All this stuff complicates things and muddy the water.
Speaker 4 (34:18):
That doesn't make it a bad thing, but there These
are obviously more complicated Financial Transact ten thirty one exchanges
along with I would say annual of deductions on depreciation
of property or of some of the little secrets.
Speaker 3 (34:29):
That real estate investors enjoy and why they like to
do that.
Speaker 4 (34:32):
So for those of you may not be familiar, if
you own a piece of prop piece of investment property
and you want to sell it and reinvest in something else,
you can actually do that without paying any taxes. That's
a ten thirty one exchange. So I guess ron, I'd
have a bigger question for you. You've owned rental property.
You see what it's like. Are you selling this because
you don't want to plumb toilets on Christmas Eve anymore?
Is that why it is? Or is it simply a
better investment decision? So yes, you could. If you want
(34:56):
to simplify your life and you're tired of dealing with
the with the taxes, or I'm sorry, with all the
extra work comes along with that, then yeah, you need to.
Speaker 3 (35:04):
I would bail out of that and be done with it.
Speaker 4 (35:06):
The ten thirty one exchange plays a role if you
want to continue and it's a more efficient investment something
like that. Now, I want to make sure you know
that you can't take that ten thirty one and go
buy your own vacation home or something like that. It
has to be a like kind investment oriented property.
Speaker 3 (35:20):
All right.
Speaker 2 (35:20):
Coming up next, I've got my two cents on how
I'm funding a potential long term care need. You're listening
to simply Money, presented by all Worth Financial lawed fifty
five KRCE The talk station.
Speaker 5 (35:33):
The News when it happens, Breaking news tonight.
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Have you been notified that your subsidy for obamaca?
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No?
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Worried that next month I have to choose between groceries
for my kids or gas for my car.
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Talk about it here. Fifty five KRC The talk station.
Speaker 3 (36:16):
They're listening to Simply.
Speaker 2 (36:17):
Money because I have by all Worth Financial. I'm Bob
sponsorller along with Brian James. I want to get in Brian.
We did a segment on how to pay for and
fund you know, a potential long term care need.
Speaker 3 (36:28):
You know, I don't know, late last week or something
like that.
Speaker 2 (36:31):
And you know, while we were talking through that topic,
if I'm just an average listener listening to us go
through all these variety of gobblygook options, I'm sitting there thinking,
what the hell are you guys talking about. You know,
there's so many moving parts. Insurance companies change the premiums,
it will, It can get extremely confusing. So I thought
I would just share what I'm doing, what my wife
(36:54):
and I are doing in terms of funding this potential need.
And I respect the the hell out of you as
a financial advisor, so you know you're going to hear
my thoughts live here, and feel free to poke holes
in it and tell me I'm stupid and.
Speaker 3 (37:08):
Why back at you?
Speaker 4 (37:09):
And I'm ten years younger than you, So write down
all the mistakes you make so I don't have to
make them.
Speaker 2 (37:13):
All right, Here's what I'm doing I've got a I've
got a permanent life insurance policy that I funded for years.
It's got a healthy cash value in it. And this
is the way my little pea brain works. Okay, I
know that there's one hundred percent probability that I'm going
to die someday.
Speaker 3 (37:32):
Right, we can agree on that.
Speaker 2 (37:33):
Yes, you look at the actuarial numbers on long term
care for an average married couple, of the odds are
about fifty percent that somebody's going to need long term
care insurance. So if you buy this traditional long term
care insurance, there's a fifty percent chance that you're just
throwing the money down a rat hole. And the other
thing is companies have done a horrible job price product
(37:57):
in the forty some years that's been around, so the
prices move all over the place. So the way I'm
looking at this, and I've told my wife this, I'm
going to keep this insurance policy. So if you got
to throw me in a room somewhere at a nursing home,
just make sure I got a TV, internet and a
remote so I can watch football and baseball, and that
they come feed me, you know.
Speaker 3 (38:17):
At least once a day. Make sure your socks match.
Speaker 2 (38:19):
And then we can really we can spend what we
need to spend, and then you're gonna have this policy
come through on the back end and backfill what we
need to spend. By the way, my wife is six
years younger than me. She's super healthy, so I want
to make sure that she's taken care of on the
financial But that that's what I'm doing.
Speaker 4 (38:37):
So I want to be clear, you're not talking about
ten thirty five exchanging into a policy that actually has
a long term care run. I just talking about straight up. No,
I'm going to spend our money and then when I
kick it, here Carrie, here's a pile of death benefit
that drops out.
Speaker 3 (38:48):
Of the sky.
Speaker 2 (38:48):
Absolutely okay, because I know my family has a one
hundred percent chance of getting that check someday.
Speaker 4 (38:54):
Okay, So as have you actually run the numbers, because
to me, I at least would be looking at one
of the newer policies with one of those riders just
to see what it looks like.
Speaker 3 (39:02):
Have you ed you done that? Not?
Speaker 2 (39:04):
Not recently? I mean I'm you know, full disclosure, I'm
sixty years old. This policy I've got, I got super
preferred rates, so it's very cheap life insurance. I don't
know if I could go out at sixty and get
you know, ultra preferred. So I haven't looked at the rates.
Are you recommending that's what I do?
Speaker 4 (39:22):
I think everybody ought to educate themselves in these types
of decisions. What are the alternatives I have actually in
front of me, and what does it look like? And
if the answer is stick with it, then stick with it.
That beats the heck out of regret. All right, good stuff.
Speaker 2 (39:32):
Hey, this is the benefit of having two people that
do this stuff, you know on the show going at
it and I will. I will follow your advice, Brian,
and I appreciate it. Thanks for listening tonight. You've been
listening to Simply Money, presented by all Worth Financial on
fifty five KRC, the talk station.
Speaker 5 (39:48):
Who wants to be Rich?
Speaker 3 (39:50):
We call them every day millionaire.
Speaker 5 (39:52):
Every day listen to Dave Ramsey.
Speaker 8 (39:55):
They typically say one of the things that turn their
life around was when they looking at purchasing something rich.
People ask how much broke people and I've been both
brother okay broke. People ask how much down and how
much a month?
Speaker 5 (40:12):
Tonight at seven oh six started asking how much By
fifty five pair z be talk station.
Speaker 3 (40:19):
This is Joe
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